Asked by Aubrielle Angell on May 02, 2024
Verified
The following information pertains to Nova Co.'s cost-volume-profit relationships: 
How much will be contributed to net operating income by the 1,001st unit sold?
A) $650
B) $500
C) $150
D) $0
Cost-Volume-Profit Relationships
An analysis tool measuring how changes in costs, sales volume, and price affect a company’s profit.
Net Operating Income
The profit realized from a business's operations after subtracting operating expenses from gross profit.
Sold Unit
Refers to a single unit of product that has been sold, representing a measure of the volume of sales transactions.
- Compute the ramifications of changes in sales volume on net operating income.
Verified Answer
TH
Tanner HearneMay 03, 2024
Final Answer :
C
Explanation :
Profit = (Unit CM × Q)- Fixed expenses
$0 = (Unit CM × 1,000 units)- $150,000
Unit CM = $150,000 ÷ 1,000 units = $150 per unit
$0 = (Unit CM × 1,000 units)- $150,000
Unit CM = $150,000 ÷ 1,000 units = $150 per unit
Learning Objectives
- Compute the ramifications of changes in sales volume on net operating income.
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